The present disclosure relates generally to an energy cost optimization system for a building, a collection of buildings, or a central plant. The present disclosure relates more particularly to an energy cost optimization system that accounts for revenue generated from participating in incentive-based demand response (IBDR) programs.
IBDR programs include various incentive-based programs such as frequency regulation (FR) and economic load demand response (ELDR). An ELDR program is typically operated by a regional transmission organization (RTO) and/or an independent system operator (ISO). The RTO and/or ISO may reward a customer for reducing their electric load during certain hours of the day. The RTO and/or ISO may operate with a bidding system in which various customers place bids with the RTO and/or ISO to reduce their electric load during selected hours. Based on the received bids, the RTO and/or ISO may dispatch awarded hours to the various customers.
Customers that participate in the ELDR program can either be awarded or penalized by the RTO and/or ISO based on the electric load of the customer during awarded hours (i.e., hours on which the customer has bid and been awarded). A customer may include a curtailment amount in their bid. A curtailment amount may be an amount that the customer will reduce their electric load with respect to a baseline load. If the customer curtails their electric load according to their bid during the awarded hours, the customer is compensated. However, if the customer does not curtail their electric load according to their bid during the awarded hours, the customer is penalized.